Franchising in Argentina: reducing dependence on the owner

A business can sell well and still be unready for franchising. If the owner handles every exception, maintains business relationships and approves every decision, part of its success still depends on one person. Before bringing new members into a franchise network in Argentina, identify that dependence and establish what can genuinely be transferred to another operator.

1. Identify where you are indispensable

The question is not whether you work long hours, but what would stop working if you were unavailable. Review a representative week and record every time you step in: discounts, complaints, urgent purchases, shift planning, bespoke quotes or service corrections.

For each intervention, note three things: what prompted it, why nobody else could resolve it and what the consequences of waiting would have been. Group decisions by their underlying cause:

• Lack of information: only you know a particular cost, relevant background or commercial term.
• Lack of authority: the team knows the solution but needs your permission.
• Lack of transferable decision-making criteria: you draw on experience but cannot yet explain how you reach your decisions.
• Dependence on external personal relationships: a customer or supplier accepts certain terms only because of their relationship with you.

This classification helps avoid the knee-jerk response of hiring more people. Adding staff does not remove a dependency if everyone still needs the same approval.

Prioritise interventions by their frequency and impact on cash flow, quality or business continuity. An exceptional decision can be critical; numerous small queries can also make a franchisee’s day-to-day operation unworkable.

2. Turn intuition into decisions others can make

It is not enough to say that people need ‘commercial judgement’. Describe the information you use, the limits you observe and the situations that require consultation. The aim is not to reproduce your personality, but to make the reasoning needed to run the business transferable.

For example, when handling a complaint, distinguish between correcting an order, issuing a refund and offering additional compensation. Each response needs someone responsible, a clear limit and a record of what happened. Amounts and conditions must reflect the business’s actual economics, rather than arbitrary figures.

Prepare a short matrix with four columns: decision, person responsible, limits of authority and reason for escalation. Distinguish between matters for the local operator and those the franchisor must resolve.

Delegating does not mean giving instructions to a future franchisee’s staff. It means defining a system that an independent business owner can apply within their own organisation. Nor does it mean eliminating all consultation: exceptions happen, but they should not become the normal way of working.

Where an advantage depends on a personal relationship — an informal purchasing arrangement, for example — check whether it can be extended to others. Do not present it as a replicable part of the model until this is clear.

3. Measure autonomy and its true cost

Assess whether someone else can manage day-to-day operations with the authority you have defined. This is not about opening another outlet, but about observing who makes decisions in the existing business and what resources they use.

Keep a record of queries referred to the owner, pending decisions, errors requiring work to be redone and situations resolved without your involvement. Compare equivalent periods and note any unusual circumstances, so that you do not mistake a quieter week for greater autonomy.

Also calculate the cost of replacing your operational contribution. If you serve customers, handle purchasing, manage administration and resolve complaints without allowing for pay comparable to the cost of that work, the outlet’s results may conceal labour that another operator will have to pay for or undertake themselves.

You will not necessarily need to hire one person for each role. What matters is allocating realistic hours, responsibilities and costs, without counting the same task twice. If the franchisee is expected to work in the business personally, that commitment must be explicit: it is not equivalent to a passive investment.

4. Link autonomy to Argentina’s legal framework

Argentina specifically regulates franchising under Articles 1512 to 1524 of the Civil and Commercial Code of the Argentine Nation, enacted by Law No. 26,994. A franchise should therefore not be treated as a contract without its own regulatory framework.

Article 1512 provides for the right to use a proven system under the franchisor’s branding, together with technical know-how and ongoing assistance. This makes it important to distinguish between a transferable system and an operation sustained by personal interventions that cannot be replicated.

Article 1520 also states that the franchisor is not responsible for the system’s profitability. This rule does not remove the liability established in Article 1521 for design defects that cause proven loss or damage to the franchisee, where that loss or damage does not arise from the franchisee’s gross negligence or wilful misconduct.

With legal and accounting advice, review which functions each party can take on and which still lack a transferable solution. Practical conclusion: before offering your franchise, identify the interventions for which you remain indispensable, put an alternative in place for each and verify its cost. Franchising requires transferring a way of operating, not promising unlimited access to the founder.